Increased interest in electric vehicles suggests tipping point in Singapore
The region is betting big on electric vehicles (EVs), with countries vying for different parts of the lucrative pie. That being said, there are still several barriers for EV adoption throughout the region, including limited vehicle choices, lack of charging infrastructure and higher upfront vehicle cost. In this series of stories, BT takes a look at what governments in Singapore, Indonesia and Thailand are doing to spur the adoption of EVs and how they are positioning their respective economies to ride this wave.
Singapore
THE marked increase in interest in electric vehicles (EVs) in the past fortnight suggests that Singapore is moving toward a real tipping point moment which augers well for the Republic's ambition to be a hub for innovation and EV manufacturing.
Indeed, market watchers have suggested that an EV innovation cluster would be able to enjoy synergy with the existing aviation innovation cluster in Singapore, thereby presenting Singaporeans with deep skills in other manufacturing industries to shift and innovate in a new industry.
Paul Welsford, the vice-president of the Electric Vehicle Association of Singapore (EVAS), is particularly excited about this development, given that the association's Facebook group has welcomed close to 400 new members in the last two weeks alone, a 20 per cent increase.
The heightened interest is in large part driven by recent announcements including the Singapore Green Plan which unveiled the hefty goal of 60,000 charging points at public car parks and private premises by 2030.
In his Budget speech on Feb 16, Deputy Prime Minister and Finance Minister Heng Swee Keat also unveiled more incentives to encourage the early adoption of EVs.
These incentives are aimed at narrowing the cost differential between electric cars and internal combustion engine (ICE) cars, and include lowering the Additional Registration Fee floor to zero and adjusting the road tax so that it is comparable to ICE cars.
But for Andrey Berdichevskiy, Deloitte's global Future of Mobility Solution Centre leader, one of the biggest barriers to adoption is a lack of offering of the right vehicle models, especially for many fleet operators.
"This gets overlooked a lot because the reporting tends to focus on private consumers," he said.
"However, fleet use cases such as ride hailing, last-mile logistics, and public transport in South-east Asia travel four to five times the distance travelled by private-use cars on an annual basis, having a positive impact on the total cost of ownership."
EVAS' Mr Welsford said there are currently 14 passenger vehicle models including sedans, SUVs, and hatchbacks in Singapore; two models of light goods vehicles, and 1 model for heavy goods vehicles.
And while he acknowledged that this is a small selection, given that "globally there are hundreds of EV models in production", he also said that news such as the relaunch of Tesla in Singapore, and the fact that they are pricing their cars so competitively, bodes well.
He is also optimistic about the role Singapore could play in the manufacture of EVs, noting that it is "very exciting" that vehicles are being produced in Singapore again.
The Hyundai innovation centre, which is set to be completed by the end of 2022, could produce up to 30,000 vehicles per year by 2025.
At the groundbreaking ceremony last year, Prime Minister Lee Hsien Loong quipped "we did not think that Singapore would one day be manufacturing cars again. But Singapore is where we have made the impossible possible".
The potential benefits to be accrued from building an ecosystem around EVs is undeniable both for the Republic, where manufacturing continues to be an important growth driver; and for the region.
Singapore in this case could see value in entering various parts of the downstream value chain, for example, in the recycling of rare-earth elements, said Deloitte's Mr Berdichevskiy.
On the regional front, countries such as Indonesia and the Philippines, with their rich sources of cobalt, are increasingly gaining the attention of EV component manufacturers.
"Not only do these markets carry fewer geo-political risks, but their proximity to local and regional EV production facilities may also be a lucrative pull factor for original equipment manufacturers (OEMs) who stand to benefit from significantly reduced importation costs," said Mr Berdichevskiy.
While countries like Thailand and Malaysia are traditional car manufacturing powerhouses, it is worth noting that Vietnam is starting to make waves in the field.
VinFast, the car-making arm of Vietnamese conglomerate Vingroup for instance, is rolling out its own electric self-driving vehicles.
The company unveiled three sport utility vehicles in January this year and announced plans to deliver within Vietnam by as early as November this year, and to Europe and the US by 2022.
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